FINAL REPORT JUNE 2019 Fresno Council of Governments City of Fresno Triennial Performance Audit FY 2015/16 - FY 2017/18 moore & associates City of Fresno (Fresno Area Express) Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Table of Contents Chapter 1: Executive Summary ........................................................ 01 Chapter 2: Review Scope and Methodology ..................................... 03 Chapter 3: Program Compliance ...................................................... 07 Chapter 4: Prior Recommendations ................................................. 13 Chapter 5: Data Reporting Analysis ................................................. 15 Chapter 6: Performance Analysis ..................................................... 17 Chapter 7: Functional Review .......................................................... 35 Chapter 8: Findings and Recommendations ..................................... 49 Moore & Associates, Inc. | 2019 City of Fresno (Fresno Area Express) Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report This page intentionally blank. Moore & Associates, Inc. | 2019 City of Fresno (Fresno Area Express) Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Chapter 1 Executive Summary In 2018, the Fresno Council of Governments (Fresno COG) selected Moore & Associates, Inc., to prepare Triennial Performance Audits of itself as the RTPA and the four transit operators to which it allocates TDA funding. Moore & Associates is a consulting firm specializing in public transportation. Selection of the consultant followed a competitive procurement process. The California Public Utilities Code requires all recipients of Transit Development Act (TDA) Article 4 funding to complete an independent audit on a three-year cycle in order to maintain TDA funding eligibility. Audits of Article 8 recipients are encouraged. The Triennial Performance Audit is designed to be an independent and objective evaluation of the City of Fresno (Fresno Area Express) as a public transit operator, providing operator management with information on the economy, efficiency, and effectiveness of its programs across the prior three fiscal years. In addition to assuring legislative and governing bodies (as well as the public) that resources are being economically and efficiently utilized, the Triennial Performance Audit fulfills the requirement of PUC Section 99246(a) that the RTPA designate an entity other than itself to conduct a performance audit of the activities of each operator to whom it allocates TDA funds. This chapter summarizes key findings and recommendations developed during the Triennial Performance Audit (TPA) of the City of Fresno’s (Fresno Area Express) public transit program for the period Fiscal Year 2015/16 through Fiscal Year 2017/18. Service Overview The City of Fresno operates Fresno Area Express, which includes 16 fixed routes. The service operates within Fresno city limits. Service is available on weekdays from 6:00 a.m. through 1:00 a.m., and weekends from 6:00 a.m. through 8:00 p.m. The service does not operate on designated holidays. The City also operates Q, a bus rapid transit service of approximately 16 miles along Blackstone Avenue, serving key shopping centers, hospitals, and other significant locations. Fare is the same price as FAX’s fixed-route service. Fares are purchased prior to boarding. Handy Ride is a curb-to-curb ADA complementary paratransit service available to eligible persons with disabilities who cannot use the FAX fixed-route service. Trips are provided on a first-come, first-served basis. Requests for service may be made one to two days in advance. This performance audit was conducted in accordance with generally accepted government auditing standards. Those standards require the audit team plans and performs the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions based on the audit objectives. Moore & Associates believes the evidence obtained provides a reasonable basis for our findings and conclusions. 1 Moore & Associates, Inc. | 2019 City of Fresno (Fresno Area Express) Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report This audit was also conducted in accordance with the processes established by the California Department of Transportation (Caltrans), as outlined in the Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Entities. The Triennial Performance Audit includes five elements: Compliance requirements, Follow-up of prior report recommendations, Analysis of program data reporting, Performance Audit, and Functional review. Test of Compliance The City of Fresno (Fresno Area Express) met the test of compliance with respect to all Transportation Development Act (TDA) regulations. Status of Prior Recommendations 1. Ensure that FTE data for Handy Ride paratransit are reported in the State Controller’s Report. Status: Implemented. 2. Provide Title VI Policy documentation in Spanish. Status: Implemented. Findings and Recommendations Based on discussions with City staff, analysis of program performance, and a review of program compliance and function, Moore & Associates submits no compliance findings for the City of Fresno. Moore & Associates has identified two functional findings. While these findings do not affect TDA compliance, we believe they warrant inclusion within this audit: 1. The City does not report local supplementation separate from fare revenue in its TDA fiscal audits. 2. Financial and FTE operating data is reported inconsistently. Exhibit 1.1 Summary of Audit Recommendations Functional Recommendations Importance Timeline Clarify the source of all funds being counted as 1 High FY 2019/20 farebox revenue in the TDA fiscal audit. 2 Ensure data is reported consistently and accurately. Medium FY 2019/20 2 Moore & Associates, Inc. | 2019 City of Fresno (Fresno Area Express) Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Chapter 2 Review Scope and Methodology The Triennial Performance Audit (TPA) of the City of Fresno’s (Fresno Area Express) public transit program covers the three-year period ending June 30, 2018. The California Public Utilities Code requires all recipients of Transit Development Act (TDA) funding to complete an independent review on a three- year cycle in order to maintain TDA funding eligibility. In 2018, the Fresno Council of Governments (Fresno COG) selected Moore & Associates, Inc., to prepare Triennial Performance Audits of itself as the RTPA and the four transit operators to which it allocates TDA funding. Moore & Associates is a consulting firm specializing in public transportation. Selection of the consultant followed a competitive procurement process. The Triennial Performance Audit is designed to be an independent and objective evaluation of the City of Fresno (Fresno Area Express) as a public transit operator. Direct benefits of a Triennial Performance Audit include providing operator management with information on the economy, efficiency, and effectiveness of its programs across the prior three years; helpful insight for use in future planning; and assuring legislative and governing bodies (as well as the public) that resources are being economically and efficiently utilized. Finally, the Triennial Performance Audit fulfills the requirement of PUC Section 99246(a) that the RTPA designate an entity other than itself to conduct a performance audit of the activities of each transit operator to which it allocates TDA funds. This performance audit was conducted in accordance with generally accepted government auditing standards. Those standards require the audit team plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for its findings and conclusions based on the audit objectives. Moore & Associates believes the evidence obtained provides a reasonable basis for our findings and conclusions. The audit was also conducted in accordance with the processes established by the California Department of Transportation (Caltrans), as outlined in the Performance Audit Guidebook for Transit Operators and Regional Transportation Planning Entities, as well as Government Audit Standards published by the U.S. Comptroller General. Objectives A Triennial Performance Audit has five primary objectives: 1. Assess compliance with TDA regulations; 2. Review improvements subsequently implemented as well as progress toward adopted goals; 3. Review the accuracy of data reporting; 4. Evaluate the efficiency and effectiveness of the transit operator; and 5. Provide sound, constructive recommendations for improving the efficiency and functionality of the transit operator. 3 Moore & Associates, Inc. | 2019 City of Fresno (Fresno Area Express) Triennial Performance Audit, FY 2015/16 - FY 2017/18 Final Report Scope The TPA is a systematic review of performance evaluating the efficiency, economy, and effectiveness of the transit operator. The audit of the City of Fresno (Fresno Area Express) included five tasks: 1. A review of compliance with TDA requirements and regulations. 2. An assessment of the implementation of recommendations contained in prior performance audits. 3. A verification of the methodology for calculating performance indicators including the following activities: Assessment of internal controls, Test of data collection methods, Calculation of performance indicators, and Evaluation of performance. 4. Examination of the following